In the new medical insurance era, under the price reduction of innovative drugs, how can pharmaceutical companies seek better development?

In medical insurance, opportunities outweigh challenges

The new list of medical insurance has been officially launched on January 1, 2020, and discussions are continuing around negotiating drug price reductions.

In the face of the surprising decline in medical insurance negotiations and the subsequent reaction of the capital market, some industry insiders began to ask whether the pharmaceutical negotiations are good or bad for pharmaceutical companies.

Some policy experts in the medical insurance industry said that the actual decline was not that big, considering that new drugs would be exempted from drug rebates after entering the medical insurance, and some imported oncology drugs without generic competition had limited reduction in negotiations. It should be said that patent cliff is the main reason for the price reduction of innovative drugs.

Wang Xuegong, vice president of China Pharmaceutical Enterprise Management Association, also said that the opportunities of medical insurance negotiation for innovative drugs outweigh the challenges, and what drug companies get in exchange for price reduction through negotiation is -- faster access to medical insurance, wider market penetration and earlier peak sales.

For example, Wang said, "As far as I know, an innovative drug company is making every effort to get its drug approved in 2019 in order to enter the 2020 healthcare negotiations."

Into medical insurance, supplement sales weakness

Yin Zheng, partner of Sany Innovation Investment Management Co., LTD., further said that it is very important for companies with weak sales capacity to enter medical insurance, such as Cidabenamine of micro-core biology - according to Cyperlan inquiry, data show that in July 2017, Cidabenamine was reduced by 30% to enter medical insurance, and sales revenue increased by 66.22% year-on-year.

Other data show that from 2016 to 2018, the three-year sales data of Cida benamine were 55.7588 million yuan, 926.83 million yuan and 137 million yuan respectively. It is worth noting that the gross profit margin of Cida benamine did not change significantly under the condition of 30% price reduction.

In November 28, the national health insurance bureau held 2019 health-care negotiation conference drug catalogue, one of novartis China executives to match the blue parker said that several varieties of novartis, on entering the health overall sales have increased in line with expectations, novartis has been attached great importance to the Chinese market, willing to drop enough, Making medicines available to a wider range of patients.

The executive further told Cerberum that the continued strong participation of multinational drug companies in health care negotiations has itself demonstrated the significance of access to health care for new drugs.

According to public data, Novartis has successfully renewed two varieties of sacubitril valsartan sodium tablets and everolimus tablets, a total of 7 varieties were included in the medical insurance negotiation drug list in 2019.

On November 28th, the national health insurance bureau released 2019 successful talks, and into the health care b range of 97 varieties, these varieties are mainly listed soon and has high clinical value of medicines, involved in cancer, a rare disease, hepatitis, diabetes, mdr-tb, rheumatoid immune, cardiovascular, digestive and so on more than 10 clinical therapeutic areas.

After reducing the price, winning sales is an inevitable choice

Industrial Securities in an industry investment strategy report, innovation is still the future of the same theme, but need to consider comprehensive competitive advantages. Innovative drugs ≠ no price reduction, especially for hot targets with fierce competition, it is an inevitable choice for enterprises to obtain greater sales volume on the new price system.

Faced with the pressure of price reduction, Industrial Securities analysis points out that to ensure the sales revenue after the variety is approved, enterprises need to have a comprehensive ability -- including market access, academic promotion planning, terminal sales coverage, product portfolio combination, mature large pharmaceutical enterprises have considerable advantages in these aspects.

According to Song Ruilin, president of the China Association for the Promotion of Pharmaceutical Innovation, the health insurance negotiations have taught drug companies that it is impossible to get new revenue without new value, and it turns out that some of the supposed blockbusters may turn out to be just a grenade in the market.

RDPAC Lin Jian, head of market access also said, now speeding up health-care adjust frequency, drug firms need to seize the time to market, pharmacoeconomics, clinical value evaluation in advance to do work, a new drug into health care, clinical innovation, pharmacoeconomics, the impact on the medical insurance fund and influence within the scope of the health bureau of consideration.

On the one hand, we should focus on the new value of drugs, and on the other hand, we should focus on the development of the international market. Song Ruilin pointed out that China's pharmaceutical industry only makes money in the Chinese market at present, while the pharmaceutical companies listed in the United States make money globally. To say the least, Chinese pharmaceutical companies cannot afford to lose.

In the long run, the internal pressure in China and society to lower drug prices will not abate; The entry of foreign pharmaceutical companies such as India is an external pressure, and Chinese pharmaceutical companies can be said to face both internal and external pressure.

In the face of falling drug prices, Song pointed out that it is urgent for Chinese drug companies to explore the global market. At the same time, he also suggested that the health insurance under the National Health insurance bureau is not the whole content of China's health insurance, and drug companies can take a broader view.